The city’s Board of Estimates approved on Wednesday a $200,000 incentive aimed at retaining 70 H&S Bakery Inc. jobs that are moving to the company’s new distribution facility being constructed at Hollander 95 business park.

Proposed by the Baltimore Development Corp., the incentive includes a penalty of $2,857 per employee H&S dismisses before September 2015. BDC President Brenda McKenzie said she was unsure of how the proposal originated, but said it was clear the incentive was a good move for the city considering H&S had decided to keep the facility within city limits and had longtime roots here. Distribution for the company is now handled out of a building located in Fells Point on South Eden Street.

“In this case, we’re making a relatively small investment considering the overall private investment” of $7 million, McKenzie said. “They have over 600 employees and keeping this as a major base of operation is an opportunity to keep those jobs is here.”

Much of the H&S workforce is located in Fells Point, where the bakery operates a manufacturing plant on South Bond Street. The company also operates manufacturing plants in the city on North Franklintown Road, East Baltimore Street, Fitch Lane and Commercial Avenue, but the South Eden Street facility has generated considerable interest because H&S President John Paterakis has said the site would become part of his Harbor East redevelopment.

“I think people put their money where their mouth is and if they’re willing to invest $7 million,” the $200,000 in city money could be viewed as a small portion of that, McKenzie said. “I would say typically the more someone invests in a place, the more they are like to stay.”

Even so, the agreement with H&S is structured to have them simply hold onto the 70 jobs, and does not require them to add workers as other agreements with the city have done. Asked how the city benefits economically from such a deal, McKenzie said, “It’s good for people to question us reinvesting dollars wisely. But if it’s a question of whether we should do larger investments, it has to be tailored to that need.”

“If we are growing the city and are encouraging investments, we have to understand this is serious business,” McKenzie said. “We’re looking to work with companies interested in investing in the city.”

H&S officials could not be reached for comment.

The $200,000 cost-sharing agreement will help pay for construction drawings and engineering plans to move utilities on the 2.8-acre site at the business park. The city’s public works department has already agreed to perform the utility work under a development agreement passed by the Board of Estimates in December.

Hollander 95 is in East Baltimore, near the Baltimore County line. The site was formerly a city housing development.